Co-owning A House and Writing A Will

What if I own my house with someone else?

It’s common for people to co-own a house e.g. with your partner.

There are a couple of ways in which you can co-own a house with someone; there’s the option of being ‘joint tenants’ or alternatively ‘tenants in common’.

Joint tenants

Two people co-owning a house as joint tenants is the most frequent option. However, this can lack flexibility, which you must take note of. Joint tenants each own an equal share of the property, and upon the death of one of the owners, the other would automatically take ownership of the other half and therefore become sole owner of the property.

This provides difficulties in a situation in which one of the co-owners wants to pass the house on to, for example, one of their adult children in order to utilise the nil-rate band. During lifetime or by Will, the property can not be passed on to a beneficiary. It would pass automatically to the surviving joint owner.

If neither of you have written a Will, then the house would pass under the rules of intestacy and intestacy rules would decide who shall inherit the property. This means that you will have no say in who inherits the house, which can cause great distress to surviving family members and people you would’ve had as beneficiaries, especially if they were expecting and depending upon inheriting the house.

To avoid such complications, it is easier to own the house as ‘tenants in common’.

Tenants in Common

Co-owning the house as tenants in common is a much more flexible option for both people, allowing you to share out your assets at your own discretion.

As tenants in common, both of you will own a share of the property. You don’t even have to own equal shares either; it’s completely up to the two of you to decide how you wish to split the shares of the house.

Furthermore, when you write a Will, the advantage of being tenants in common allows you to decide who you want your share to go to. You can even split your share up among multiple beneficiaries. This can prove advantageous for partners / joint owners with children from different relationships to ensure that their children receive their parents share eventually and that their share does not go else where.

There can also be advantages when it comes to future care home fees and your Will, if you hold your property as tenants in common and you give your partner / co owner a life interest  in your half share of the property.

Don’t worry if you’re currently owning your house as joint tenants, as you can easily change this to tenants in common.

Living with Partner but Unmarried

If you live with your partner but you’re not married, what will happen to your house if your partner, who owns the house, passes away?

If your partner owned the house on their own but then pass away without having written a will, the property will be passed on in accordance with the rules of intestacy. Under these rules, the house is not guaranteed to pass onto you, even if your partner would have chosen you as the beneficiary of the house. Instead, the house could be inherited by family members instead, or maybe any children they’ve had in a previous relationship.

As an unmarried couple, in order for your assets to be inherited by one another on the sad event of death, Wills must be written.

However, if you have been making some form of contribution towards the house you’ve been living in, despite being unmarried and not being a beneficial joint tenant. you may have some rights. This is because these contributions display a beneficial interest.

Therefore, you may have the right to live in the house or be given a share of its value if it gets sold, this would have to be decided by Court.

‘Beneficial interest’ is essentially just interest in the economic benefit of the property in question. This type of interest can arise if a Trust has been formed. The property may be in one name (the name of your partner), but a Trust allows for the benefit or value of the property to be shared. This doesn’t have to be an equal share, though.

If you do end up inheriting property or money from an unmarried partner, you won’t be exempt from inheritance tax, as married couples are.

The most important thing to remember is that all these complications can be avoided by ensuring that you and your partner both have an up-to-date Will written. In the Will, you can make sure that your intentions are clear, and you can simply state that you want your partner to inherit the property if you were to die.

Other Important Times to Look at your Will

Best times to update your Will

Buying a house isn’t the only life event that merits writing or updating your Will. If you have written a Will already, good job! We advise you review your Will every four to five years, or after any major life events, including:

• Having a baby
• Getting married
• Getting divorced/separated
• Buying other large assets
• The death of your Will’s executor